9-27-24 Market Moment

By Randy Williams Gurian on September 27, 2024

Market Melt-Ups

I have been around long enough to know what a market melt-up feels like. (Think the opposite of a meltdown.) I remember the rally in 1996, another in 1999, and irrational exuberance. I was an investor during both the dot-com bubble and the real-estate crisis in 2006 when Wall Street got into the real-estate business. All these periods in the market felt the same in at least one way: investors looked at the stock market and said, regardless of fundamentals, it’s time to buy. Nobody wants to miss the party or be late to join in on the fun. Never forget to eat pie when the market is serving pie. 

One could argue today’s U.S. equity markets are a little top heavy and the gains feel ahead of themselves, especially with the magnificent seven. Is this a bubble or are we in the third or fourth inning of a bull-market cycle? Bull markets don’t usually get extended until late in the cycle, and I don’t think we are late in this one yet. The Fed is just getting started with its interest-rate reductions. They may be behind the curve and need to accelerate their rate reductions, which is elixir for the markets as long as the economy avoids a recession. I think the markets have already priced in the election, and I think the S&P 500 will add to its already impressive gains for the year. Inflation is coming down and earnings should continue to rise, especially for the AI-related names. Don’t let Mr. Market scare you into thinking the game is over just yet.

Speaking of the game being over, the Mariners were officially eliminated from playoff contention today. Because they took such a slide earlier in the season—and not into home plate—our players will watch the playoffs and the World Series from their living room couches. It is almost therapeutic to have the M’s declared out of it on an off day, allowing the organization and the players more time to think about the pain that being eliminated creates after a long season.

This weekend is all about fan appreciation, and to this long-suffering fan, we deserve to be appreciated for hanging onto the dream for so long! If the players have trouble digesting being out of post-season play, imagine how the fan base feels. The Mariners have potential, and their farm system is loaded. The players are paid to win baseball games, but they can only do so if ownership invests in solid hitters. If they choose to save that money or only focus on defensive players (pitchers), then they should take their ball and go home.  Let someone else who wants to spend the money field a winning team, and maybe even create a World Series contender. Maybe the M’s ownership group is being fooled by Mr. Market, and they could benefit from reading my Market Moments. We want to eat pie next season!